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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 6, 2003
Berry Petroleum Company
(Exact name of registrant as specified in its charter)
Delaware 1-9735 77-0079387
(State or other (Commission IRS Employer
jurisdiction of File Number) Identification No.
incorporation)
5201 Truxtun Avenue, Suite 300 Bakersfield, CA 93309
(Address of principal executive offices)
Registrant's telephone number, including area code (661) 616-3900
N/A
(Former name or former address, if changed since last report)
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Item 9. Regulation FD Disclosure
On August 6, 2003, Berry Petroleum Company, a Delaware
corporation, issued a press release, a copy of which is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
(c) Exhibits
99.1 Press Release of Berry Petroleum Company dated
August 6, 2003.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
BERRY PETROLEUM COMPANY
By /s/ Kenneth A. Olson
Name: Kenneth A. Olson
Title: Corporate Secretary
and Treasurer
August 6, 2003
2
News Release
Berry Petroleum Company Phone (661) 616-3900
5201 Truxtun Avenue, Suite 300 E-mail: ir@bry.com
Bakersfield, California 93309-0640 Internet: www.bry.com
Contacts: Jerry V. Hoffman, Chairman, President and CEO -
Ralph J. Goehring, SVP & CFO
BERRY PETROLEUM EARNS $6.5 MILLION IN SECOND QUARTER
Bakersfield, CA - August 6, 2003 - Berry Petroleum Company
(NYSE:BRY) announced net income of $6.5 million, or $.30 per share for
the second quarter ended June 30, 2003, compared to net income of $6.8
million, or $.31 per share for the same period in 2002. Revenues in
the second quarter of 2003 of $40.1 million were up 21% from revenues
of $33.2 million in the same period of 2002 due to increased heavy
crude oil prices and production levels. Net income for the second
quarter was slightly lower when compared to the second quarter of
2002, primarily due to higher steam related operating costs.
Jerry V. Hoffman, Chairman, President and Chief Executive
Officer, stated, "The second quarter results were in line with our
expectations. We expected our steam operating costs to be higher than
the same period in 2002 as we increased our steam injection volumes by
10%. In addition, the price of natural gas used to generate steam
nearly doubled. Increased steam injection, along with the results of
our 2003 development program, will pay off in future periods through
increased production."
The increased steaming activities caused operating costs per BOE
to increase to $11.15 in the second quarter of 2003 from $8.51 in the
second quarter of 2002. The Company anticipates operating costs per
BOE to decrease in upcoming quarters due to higher production volumes,
assuming stable electricity and natural gas prices.
Oil and gas production was 15,397 BOE/day in the second quarter
of 2003, up 10% from 14,060 in the same 2002 period. The current
quarter production was down slightly from the first quarter 2003
production of 15,736 BOE/day, resulting primarily from shutting-in
production from adjacent wells during drilling and taking wells off
production to increase steaming.
For the second quarter of 2003, the average crude oil price
received per barrel of oil equivalent (BOE) was $21.07, up 5% from
$19.99 received in the comparable 2002 period. Although the current
quarter price was down 13% from $24.23 received in the first quarter
of 2003, the posted price for the Company's heavy crude oil has
increased in the third quarter to $26.50 per barrel as of August 4,
2003, which is 15% higher than the average posted price for the second
quarter of 2003.
Hoffman added, "We are about halfway through our 2003 development
program, but this activity, because of timing, had little impact on
first half production volumes. We expect production for the 2003
calendar year from existing properties to average approximately 16,000
BOE/day. In addition, although the transaction is subject to certain
conditions, we still expect to close our Brundage Canyon acquisition
in the third quarter. Brundage Canyon's current production is
approximately 2,000 BOE/day. After closing, we would initiate the
drilling of development wells at Brundage Canyon."
Six-Month Results
Net income rose to $15.7 million, or $.72 per share, for the six
months ended June 30, 2003, compared to $15.4 million, or $.71 per
share, for the same period in 2002. Revenues in 2003 were $87.3
million versus $60.6 million last year. Results in 2003 include the
pre-tax write-off of $2.5 million for the cost of a pilot project and
associated leasehold acreage, while results in 2002 include a pre-tax
gain from the recovery of a $3.6 million receivable for electricity
sales that were written off by the Company in 2001.
Ralph J. Goehring, Senior Vice President and Chief Financial
Officer, said, "With our planned expansion into a new core area in the
Rockies and the opening of our Denver office to pursue additional
opportunities, our General and Administrative costs were 8% higher per
BOE for the second quarter of 2003 as compared to both the first
quarter of 2003 and the second quarter of 2002. We anticipate,
however, that increased production from the Company's acquisition and
development activities will result in lower General and Administrative
costs per BOE in upcoming quarters. We are pleased to have put in
place our newly completed $200 million unsecured credit facility which
recognizes our strong financial position and should provide for
significant low-cost capital which will be beneficial in our continued
search for acquisitions."
During the second quarter of 2003, the Company aggressively
pursued the implementation of its 2003 capital development budget. As
of July 15, 2003, 46 new wells, including all 13 budgeted horizontal
wells, had been drilled. For the remainder of 2003, the Company plans
to drill an additional 53 wells on its existing properties and up to
an additional 26 wells at Brundage Canyon in the Uinta Basin, Utah
assuming the purchase closes in the third quarter. As the closing of
the purchase of Brundage Canyon is subject to certain conditions and
there is no assurance that all such conditions will be satisfied, the
number of wells that may actually be drilled at Brundage Canyon will
depend on whether or not and when the actual closing occurs. This
planned activity would bring the total year estimated development
(drilling & facility) spending to approximately $44 million.
Teleconference Call
An earnings conference call will be held Thursday, August 7, 2003
at 8:00 a.m. PT. Dial 1-800-240-4186 to participate. International
callers may dial 303-205-0033. For a digital replay available until
August 21, dial 1-800-405-2236 (passcode 546520#). Listen live or via
replay on the web at www.bry.com. Transcripts of this and previous
calls may be viewed at www.bry.com/tele.htm.
Berry Petroleum Company is a publicly traded independent oil and
gas production and exploitation company with its headquarters in
Bakersfield, California.
"Safe harbor under the Private Securities Litigation Reform Act of
1995": With the exception of historical information, the matters
discussed in this news release are forward-looking statements that
involve risks and uncertainties. Although the Company believes that
its expectations are based on reasonable assumptions, it can give no
assurance that its goals will be achieved. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements herein include, but are not limited to, the
timing and extent of changes in commodity prices for oil, gas and
electricity, gas transportation availability, the non-existence of a
liquid marketplace for electricity purchases and sales within
California, competition, environmental risks, litigation
uncertainties, drilling, development and operating risks,
uncertainties about the estimates of reserves, the prices of goods and
services, the availability of drilling rigs and other support
services, legislative and/or judicial decisions and other government
regulation.
CONDENSED INCOME STATEMENTS
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
6/30/03 6/30/02 6/30/03 6/30/02
Revenues:
Sales of oil and gas $29,466 $25,568 $63,820 $45,246
Sales of electricity 10,386 6,477 23,265 13,791
Interest and other
income, net 228 1,167 248 1,545
Total 40,080 33,212 87,333 60,582
Expenses:
Operating costs - oil
and gas 15,626 10,893 28,810 18,979
Operating costs -
electricity 10,386 6,477 23,265 13,460
Depreciation, depletion
& amortization 4,729 4,278 9,183 8,270
General and
administrative 2,404 2,032 4,661 3,894
Recovery of electricity
receivables - - - (3,631)
Dry hole and abandonment - - 2,487 -
Interest 268 261 477 684
Total 33,413 23,941 68,883 41,656
Income before income taxes 6,667 9,271 18,450 18,926
Provision for income taxes 157 2,444 2,763 3,479
Net income $ 6,510 $ 6,827 $15,687 $15,447
Basic net income per share $ .30 $ .31 $ .72 $ .71
Diluted net income per
share $ .30 $ .31 $ .72 $ .70
Cash dividends per share $ .15 $ .10 $ .25 $ .20
Weighted average common
shares:
Basic 21,764 21,735 21,761 21,734
Diluted 21,954 21,974 21,934 21,915
CONDENSED BALANCE SHEETS
(In thousands)
(unaudited)
6/30/03 12/31/02
Assets
Current assets $29,919 $28,705
Property, buildings & equipment,
net 237,137 228,475
Other assets 955 893
$268,011 $258,073
Liabilities & Shareholders' Equity
Current liabilities $31,182 $32,394
Deferred taxes 34,317 33,866
Long-term debt 15,000 15,000
Other long-term liabilities 5,635 4,755
Shareholders' equity 181,877 172,058
$268,011 $258,073
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Six Months Ended
6/30/03 6/30/02
Cash flows from operating activities:
Net income $15,687 $15,447
Depreciation, depletion &
amortization 9,183 8,270
Dry hole and abandonment 2,432 (224)
Other, net 728 1,301
Net changes in operating assets and
liabilities (5,625) 578
Net cash provided by operating
activities 22,405 25,372
Net cash used in investing activities (19,902) (11,782)
Net cash used in financing activities (5,441) (14,519)
Net decrease in cash and cash
equivalents (2,938) (929)
Cash and cash equivalents at
beginning of year 9,866 7,238
Cash and cash equivalents at end of
period $ 6,928 $ 6,309
COMPARATIVE OPERATING STATISTICS
(unaudited)
Three Months Six Months
Ended Ended
6/30/03 6/30/02 Change 6/30/03 6/30/02 Change
Oil and gas:
Net production-BOE
per day 15,397 14,060 +10% 15,566 13,930 +12%
Per BOE:
Average realized
sales price $21.07 $19.99 + 5% $22.66 $17.96 +26%
Operating costs 10.63 7.96 +34% 9.71 6.98 +39%
Production taxes .52 .55 - 5% .52 .55 - 5%
Total operating
costs 11.15 8.51 +31% 10.23 7.53 +36%
Depreciation &
depletion 3.38 3.34 + 1% 3.26 3.28 - 1%
General &
admin. expenses 1.72 1.59 + 8% 1.65 1.54 + 7%
Interest expense
per BOE .19 .20 - 5% .17 .27 -37%
Electricity:
Electric power produced -
Megawatt hours/day 2,036 1,935 + 5% 2,086 1,992 + 5%
Electric power sold -
Megawatt hours/day 1,847 1,748 + 6% 1,899 1,819 + 4%
Average sales price -
$/Mwh 62.59 39.46 +59% 68.11 36.79 +85%
Fuel gas cost -
$/Mmbtu 5.04 2.97 +70% 5.21 2.73 +91%
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